Toyota Unveils Capital Spending Strategy

Excerpt from our One-Page Annotated News Summary:

Toyota Has Multi-Year Plan To Elevate Capital Spending (Wall Street Journal)

Summary: Toyota's (TM) executive vice president Mitsuo Kinoshita announced the company would continue its record level of capital spending, which exceeds $10 billion a year, for the next several years -- a move which will challenge its competition, particularly U.S. automakers. The money will be spent beefing up the company's manufacturing capacity, with 50% of the funds allocated outside of Japan, chiefly in North America where demand for the cars is high. Toyota's goal is to increase its auto-manufacturing capacity by 470,000 vehicles to 2 million a year by 2008; the company is planning to build vehicle manufacturing plants in the Midwest, the South and Canada. Mr. Kinoshita is confident the company can sustain this level of spending; he sees Toyota gaining 10% in its operating-profit margins.
Related links: Full article • Toyota Ups Guidance, Sets Global Production Targets • Toyota Comments on U.S. Sales Outlook, Denies Tundra Production Cut • Forbes: Toyota To Maintain Heavy Capital Expenditure • Bloomberg: Toyota Still Studying Adding Another N. America Plant
Potentially impacted stocks and ETFs: General Motors (GM), Ford (F), Daimler Chrysler (DCX), Nissan (NSANY), Honda (HMC)

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